Editor’s note: ARGN is proud to bring coverage of the SXSW Interactive festival taking place this weekend. Staff reporter Dee Cook will be attending the event and sending us reports as she gets them. Check this site often for updates on SXSW and the connections to Alternate Reality Gaming as they happen.

James Surowiecki is a business columnist for The New Yorker and has also written a book entitled The Wisdom of Crowds. In his solo panel today at South by Southwest Interactive, he discussed why large groups of people are smart and why we should trust them.

According to Surowiecki, large groups of people are remarkably intelligent under the right conditions, and their potential has been greatly enhanced in the last decade from the rise of technology – most notably the widespread use of the internet. He gave several examples as proof: in a jellybean contest the crowd as a whole will do better than individuals; at a racetrack the odds very closely resemble a horse’s actual performance; when you search Google, relevant pages are usually closer to the top of the results listed. All of these things are brought about by collective intelligence. It is a mistake, he argues, to rely solely upon experts, who don’t have a good grasp of where their weaknesses and blind spots lie (with the exception of bridge players and weather men).

He stated that this intelligent crowd effect can be achieved if three prerequisites are met. First, the results must be totally democratic, where everyone participates equally and nobody cherry-picks or filters results. Second, the crowd must be diverse, bringing a range of different viewpoints to the table. This bypasses the “groupthink” or “sheeple” effect where peer pressure causes people to question and revise their own opinions. Last, people need to make their own decisions independently without piggybacking on others. If you try to bring a large group to one single consensus, that consensus will be the lowest common denominator. Better to get the full range of opinion and take the average; that is where wisdom lies. This can be difficult since humans tend to be imitative and do what others do in order to avoid being labeled as crazy. Surowiecki quoted John Keynes in his presentation: “Worldly wisdom teaches that it is better to fail conventionally than to succeed unconventionally.”

In his presentation, he noted that the internet is a double-edged sword. On the one hand there is the tremendous ability to tap into collective intelligence from all over the world, from the full spectrum of perspective. There are no filters. Anyone can post a webpage. However, it’s easy for people to fall into a rut and only visit the places they know. Danger lies in paying attention only to that which is familiar. To be a smart crowd, Surowiecki says, weak ties are better than strong ties.

Afterwards, I had a chance to think about the message behind the presentation. I think that the wise crowd or “hive mind” (which was a term notable by its absence during the presentation) is a familiar concept to ARG players and Puppetmasters. Given a large enough audience, almost any puzzle can be solved. The caveat for the game designers and players, then, would lie in remembering the requirements for a smart crowd: democracy, diversity, and individuality. It’s impossible to predict what a new player will bring to the table. Even if a player thinks he is worthless at solving puzzles, somewhere down the road he might discover that he has the corner piece for the playerbase’s grand jigsaw.